Opinion: Student Loan 'Crisis' Overshadows Real Borrowing Issues

"Repeating a falsehood over and over again does not make it any truer. Yet the idea that we are in a national student loan debt crisis has been repeated so many times that it is now accepted as gospel, even when the facts say otherwise. This misdiagnosis leads to conversations that ultimately distract us from crafting viable and effective public policies to address the very real indebtedness issues some students are facing," NASFAA President Justin Draeger writes in an op-ed published by Forbes.

"A prime example of this occurred at a House Ways and Means Committee hearing held on September 13. Renowned higher education economist Dr. Sandy Baum–who has meticulously tracked student debt over several decades–was dismissed by a lawmaker who 'felt' that despite the facts being presented, student loan debt really was much worse than the facts being presented.

Economists explain that while anecdotes about students racking up $100,000 in loan debt are certainly great fodder for scandalous news stories, they represent roughly 1% of student loan borrowers, making them clear outliers. Meanwhile, everyone from farmers to real estate agents are quick to point to student loans as the reason why we have fewer farmers and stagnating home sales. Ignored are the statistics that one in three bachelor’s degree recipients take on absolutely no debt, and another 25% take on less than $20,000 over the course of their entire educational program. Nearly half of all outstanding student loan debt is held by those who can afford it, with incomes that put them in the top 25% of all households in the country. Those in the lowest income brackets hold only 11% of all outstanding loan debt."

Read the full op-ed now on Forbes' site>> 

 

Publication Date: 10/20/2016


David S | 10/20/2016 9:28:43 AM

Good job, Justin. I had some similar thoughts in a recent EASFAA blog posting (http://easfaa.org/b/). It's frustrating that lawmakers will often use anecdotes and click bait to inform their decisions; hopefully Reauthorization of the HEA won't be a kneejerk reaction to a headline. We have distressed borrowers who need help, and all the shopping sheets and standardized award letters in the world aren't going to give them what they need. The root of the problem is what you correctly refer to as "subpar institutions," and ED needs to now go after them in a way that's going to solve the problem.

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